NAB lifted interest-only rates to meet APRA’s regulatory requirements

By Michael Mata
23 Oct 2017

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Andrew Thorburn, CEO of National Australia Bank (NAB), insists the bank lifted interest-only mortgage rates to meet new regulatory requirements, not to pass on the cost of the federal government’s $6.2bn bank levy.

“If we wanted to maximise profits, we would not have reduced principal-and-interest rates,” Thorburn told MPs in Canberra.

Antony Cahill, COO at NAB, told the House of Representatives’ standing committee on economics that NAB’s sole focus in moving rates was to meet APRA’s 30% limit. He amended this to a “key focus” under questioning by Liberal MP David Coleman, who agreed that Cahill had accidentally misspoken.

Thorburn acknowledged that NAB financial planners had falsely witnessed customer documents, but the committee accepted an internal review’s findings that this was done to speed up applications rather than procure financial gain.

Liberal MP Julia Banks said the fact that 343 staff had owned up to the policy breach made it obvious there was a “culture of sloppiness” in the bank, which began at the top.

“A review states that staff have clearly not had a financial benefit from doing this,” Thorburn said. “Having said that, [the policy breaches are] serious.”